COMPARISON OF INFORMATION AND PERFORMANCE INDICATORS
LEARNING OBJECTIVE
- CURRENT AND PREVIOUS PERIOD
- CURRENT PERIOD AND BUDGET
- PRODUCTIVITY RATIOS
- MEASURING PROFIT CENTRE PERFORMANCE
- MEASURING INVESTMENT CENTRE PERFORMANCE
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3. PRODUCTIVITY RATIOS
Production is the quantity of goods or services that are produced. Productivity is a measure of how efficiently those goods or services have been produced.
Productivity is often analyzed using three labour control ratios:
- Production volume or activity ratio- the production volume ratio
assesses the overall production. Over 100% indicates that overall
production is above planned levels, and vice versa.
=Actual output measured in standard hours/budgeted production
hours x 100%
- Capacity utilisation ratio-indicates worker capacity, in terms of the
hours of working time that have been possible in a period.
= actual hours worked/budgeted hours x 100%
- Efficiency ratio- an indicator of productivity with the benchmark being
100%. Actual output measured in standard hours/actual production hours